Insurance is only as good as the advice you get
Consumers will get better advice, service and satisfaction from insurers if they fully disclose information relevant to the risk that they wish to insure – and ask the right questions.
“Insurers rely completely on the information they are given to underwrite correctly and to be able to advise clients correctly. Without all the relevant information it becomes difficult to assess all the risks involved and provide the right cover,” says Gari Dombo, Managing Director Alexander Forbes Insurance.
The kind of information that people most often forget to disclose include the fact that they:
§ Rent out their house and are deriving an income from the property.
§ Have a thatched roof or garden cottage.
§ Occasionally park their car at their girlfriends place overnight.
§ Have changed their job (pertinent where the new job involves business travel by car with the insured vehicle).
§ Allow their child to drive their car on weekends.
§ Are going on holiday leaving their home unoccupied for two months.
§ Insure the car for private purposes though drive to the occasional business meeting.
§ Have stopped paying the armed response service.
§ Have started alterations to the home.
The information above is not relevant to all insurers and relevancy also depends on the basis of your cover. For example,
§ Many insurers are not concerned where you park when you are not at home.
§ Your vehicle cover may allow any licensed driver to use the vehicle.
Failure to disclose this information, or any other information that could affect the terms, condition or detail of your cover, may lead to claims being rejected.
So the best way to ensure that you disclose all relevant detail is to “either thoroughly read your insurance contract and ask the right questions - or over disclose so you can get the best advice,” says Dombo.
As such, Dombo advises those who do not have the time to read through their insurance contracts in detail to rather “disclose as much information as possible when talking to their insurance consultant.” The insurance consultant will know what is relevant and what advice to give.
The purpose of insurance is to protect people against unforeseen risks and possible dangers. It is not about making profit by misleading clients. Similarly, if clients try to trick their insurer into issuing a lower premium “when something does go wrong the only loser is likely to be you” warns Dombo.
For example, “if your policy is on a named driver basis and you don’t disclose that your children occasionally drive your car, your insurer will not advise you to include them as named drivers. If they damage your car, or injure themselves or others while driving, your insurer will reject your claim,” explains Dombo.
Instead insurance is about asking questions and getting good advice.
There is no shame in not understanding the wording. Dombo encourages consumers to “ask as many questions as they want until such time as they fully understand everything they are agreeing before signing.”
And when it comes to advice Dombo believes “you should develop a close relationship with your insurance consultant so that your cover can be tailored to meet your individual needs.”
For example, a good insurance consultant will advise that “you can pay a lower premium by insuring your motor and household contents in one portfolio instead of insuring your assets separately. Or if you say you are going on holiday they will suggest how you should insure the items that you take with you” explains Dombo.
Once the insurance consultant and the client form a good relationship it becomes easier for the client to ask the right questions and disclose the correct information – compared with the confusion and miscommunication that typifies the faceless call-centre scenario.
That said, warns Dombo, “insurers will not go through every single term and condition when you purchase cover. Ultimately, it remains the clients’ responsibility to read the contract and ask the relevant questions as well as remain mindful of their duty for continual disclosure.”
